Leaders of social services in England have said there will be “catastrophic consequences” without immediate investment in the sector.
Councils could run out of cash and care providers could “go to the wall”, a report by the Association of Directors of Adult Social Services (ADASS) warns.
It says increased costs due to Covid-19 have exacerbated an existing crisis.
The government has given councils an extra £3.2bn to tackle the pandemic and £600m for care.
The ADASS report warns that increased spending due to coronavirus – for example, on personal protective equipment (PPE), staffing costs and sickness cover – means some private care providers may go out of business.
It has previously estimated that providers face potential additional costs of £6.6bn between April and September.
Now the organisation is calling for a two-year ring-fenced funding settlement for adult social care and as well as reform of the sector, including better pay and conditions for care workers.
James Bullion, ADASS president, said the findings represent “a wake-up call that requires a clear response”.
“Urgent action is needed to plug the financial black hole that has been blown in local government finances, to properly recognise and reward colleagues working in social care, stabilise providers of care and most importantly safeguard and ultimately enhance the care and support available to those of us who need it,” he said.
“Without such action, local authorities will run out of money, care providers will go to the wall, many of us will not get the care and support we need, and the economy will take a further hit as more of us are forced to give up work to fill the caring gaps.”
Local authorities have been given £3.2bn by the government to support their work during the pandemic, and there is a £600m infection-control fund for care homes.
This month, the Department of Health and Social Care said it would keep future funding needs under review, but would not confirm that it would provide more money to councils.